Which statement about contingencies is true?

• A. They can be ignored in a hot market
• B. They should be cleared as soon as possible after the contract is signed
• C. They must be cleared before listing the property
• D. They have no impact on closing timing

Answer: (B)

Contingencies are conditions in a contract that must be satisfied before the sale can close. They give the buyer time to arrange financing, have a property inspected, verify the title, and handle other due‑diligence items, while also allowing either party to back out if those conditions can’t be met. The important point is that closing can’t occur until contingencies are resolved or properly waived.

Clearing contingencies as soon as possible after the contract is signed helps keep the transaction on track. It provides clarity that financing is in place, that inspection issues have been addressed or waived, and that title and other requirements are in order. If contingencies linger, deadlines can be missed, the contract may terminate, or closing can be delayed. So handling contingencies early reduces the risk of last‑minute problems and helps ensure a smooth closing timeline.

Ignoring contingencies isn’t advisable, and contingencies do impact closing timing because they must be satisfied or waived before closing.